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Revisiting Rules and Regulations in All-Age Communities: Unenforceable Rules Trumped by Familial Status Rights

November 3, 2014

Terry R. Dowdall

The FHAA

In 1988, Congress amended the Fair Housing Act (FHA) to prohibit not just discrimination on the basis of race, color, sex, religion, disability, or national origin, but also included familial status discrimination. Familial status is defined as " one or more individuals (who have not attained the age of 18 years) being domiciled with ... a parent or another person having legal custody of such individual or individuals."

Among other provisions, it is unlawful:

"To discriminate against any persons in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of ... familial status ..."

Thus, a restriction on access or use of common facilities and amenities bases on age of a child (familial status) is a violation of the FHAA, absent compelling business necessity. Any such rule must be proved to be the least restrictive means to achieving a health and safety justification. What does this legalese mean to the community owner in practical terms? A full-blown trial, risks of heavy penalties, damages, and attorney's fees and costs. This is because there is no bright line test for any age-restrictive regulation: the law is bereft of any standards or guidance to make a reasonable, predictable risk-assessment or likelihood of success. Each case depends on the facts and surrounding circumstances. In other words, each case is a test-case. In sum, the penalties are so severe that prudent counsel would admonish all to eliminate age-restrictive rules and regulations.

Children are as protected as any other protected class. Thus, a simple way to test a rule for FHA compliance is this: insert any other protected class in the place of "children" when testing a rule and regulation. For example, a common past rule (and no longer a valid one) is "all children under 14 years of age must be accompanied by an adult resident when in the pool area." Then, how does this sound: "All Methodists must be accompanied by an adult resident ...." Obviously, such a rule is patently violative of the FHA.

It is also a violation of the FHAA to express to agents, brokers, employees, prospective sellers, or renters a preference, (e.g. "... gosh, if I had my druthers, I would rather not rent to families"). Another issue is use of selective advertisements, or denying information about housing opportunities to particular segments of the housing market because of their race, color, religion, sex, handicap, familial status, or

national origin, (example, in an area overwhelmingly populated by non-English speakers, advertising only in English language publications). Other violations will be found where there are ads or statements made regarding applicants, including: "mature person;" stating an aversion to "families with children" or "teenagers in the building;" advertisements stating non more than "one child;" or, stating that the community owner does not "rent to children." Posting "Adult Community: at the entrance to a non-exempt community also violates the FHAA. Use of the word "adult" without more, constitutes a violation of the FHAA. There are no such thins as adult manufactured home communities, and use of the phrase is deemed to chill family applicants from applying for tenancy in them.

The various rules cited by the courts as impermissibly restricting access or denying the use of the communities' facilities and/or areas on the basis of age, included the following. If your rules contain any of the following restrictions, or any rules similar to them, it is strongly advised that a legal advisor conversant with the FHAA (and implanting regulations and judicial and administrative interpretations) be promptly consulted.

Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
Use of the billiards room was restricted to residents over eighteen (18) years old;
Use of the spa was prohibited to children under eighteen (18) years old;
Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
Parent or resident child or resident host must accompany children at all times in the pool or pool area.
Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
At 2 p.m. children are to be out of the pool area;
Children are not to walk around the community without adult supervision;
Minors under sixteen (16) years old are not permitted in the therapeutic pool;
For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

The court held that these rules were not based on compelling business necessity and did not represent the least restrictive intrusions on familial status rights in promoting a health and safety interest. Having held that these rules were unlawful, the issues remaining for trial in the Plaza Mobile Estates case included damages, punitive damages, civil penalties, injunctive relief and attorney's fees and costs for the private plaintiffs.

While the action had been brought as a class claim (in which all of possibly thousands of affected residents could have been included in damages awards), class certification efforts were defeated, allowing only the named parties to seek damages.

The court's comments regarding the invalidation of these rules is telling and troubling. The court stated the age-restrictive rules were facially discriminatory. In other words, no matter how administered, the rules were invalid as drafted. Even if never enforced , such rules might dissuade a prospective applicant from applying for tenancy. These rules "...treat children, and thus, families with children differently and less favorably than adults-only households." "Describ[ing] parks as 'adult' parks are clear examples of illegal steering. Although they are not outright refusals to sell or rent or families with children, they indicate a preference for adults only and certainly discourage families with children from applying."

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

The absolute prohibitions include those rules that (1) prohibit all children under 18 (or 21) years old from using the billiard room and from riding bicycles, (2) prohibit all children under 16 (or 18) years old from using the therapeutic pool, (3) prohibit all children under 14 (or 18) years old from using the sauna or Jacuzzi, (4) require all children under 8 years old to be confined to rear fenced yard of family residence, and (5) prohibit all children from playing on community streets and any other common areas.

The court held that absolute prohibitions such as the foregoing are illegal. The regulations are not the least restrictive means to achieve health and safety objectives ("...prohibiting all 'children' from playing in common areas ... cannot be justified"). The same applies with the billiard room ("... it is unclear how a 17-year-old's access to a billiard room is any more hazardous to ... health or safety that a 22-year-old's access").

Supervision restrictions

The fundamental premise adopted by the court is that "[A]ny concerns that defendants may have are not necessarily linked to age, and any concerns about problem behavior can be address with the use of rules." Thus, the court invalidated blanket prohibitions of all 15-year-olds from using the therapeutic pool and all 13-year-olds from using the sauna or Jacuzzi

In certain instances adult supervision might less restrictively advance health and safety concerns ("assuming arguendo that defendants' concerns were more logically linked to the age restrictions, requiring adult supervision rather than imposing an absolute ban is clearly a less restrictive means ..."). But where to set the limit is uncertain. California regulations state:

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning – No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

Based on the Plaza Mobile Estates decision, it is needlessly legally risky to impose any supervision requirement. Clearly, a 14 year age limit for an adult supervision is not enforceable, not legal, and constitutes a violation of the FHA, despite former administrative decisions suggesting the contrary and California regulations cited above. Yet, the need for an age limit is strikingly clear. The same rule applies to use of spas and whirlpools. Certainly an adult supervision requirement should be reasonable[1], but eh court has ruled that such concerns are fro the parents, not the management.

A few apparently unassailable precepts

Given that this case raises many more questions than it answers, the ability to promulgate and rely on age-restrictive rules for access and supervision are certainly less than a matter of clarity. While the previous rulings concerning the enforceability of age-restrictive rules are in some doubt, a few precepts can be stated with some reliability. The first is that an outright prohibition of use or access to any facility or amenity cannot be allowed. Setting up selected hours for usage of a facility of amenity cannot be allowed. Less certain is the ability to promulgate rules requiring adult supervision of children of varying ages for use of facilities or amenities. It would appear that no supervision can be mandated for areas such as clubhouse, billiard room, library or common areas.

Establishing minimum age requirements for supervision: A foray into the uncertain

The "14 and under" requirement of California regulations for pool supervision is a should not a must provision. Hence, management cannot require supervision of 14 years of age and under. The only clearly legal position is not to require supervision, and let it be for the parents to take personal accountability and responsibility for their children. The court makes this statement:

"... there is nothing magical about the age 18 or 14 years old if defendants' concerns are for the protection of the health and safety of the children or other residents in using recreational facilities or the swimming pool or riding bicycles. Such concerns could be addressed with the use of rules. Moreover, rather than being connected to such ages, bicycle and pool safety would be better served with a proficiency requirement."

The courts have intervened on occasion to require discrimination against children for their own good and government does so all the time. For example, you cannot vote until you are 18, drink alcohol until you are 21, cannot drive until you are 16.[2] However, housing providers subject to the FHA may not rely on or use the same governmentally-established restrictions in developing their rules and regulations despite the dangers posed by the common area facilities.

Another example: Pedestrian injuries are the second greatest cause of harm to children from five to 14 years of age. See the National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997.[3] However, it is illegal to have a rule and regulations which states that "children are not to walk around the community without adult supervision."

Is it unreasonable to require adult supervision within the common areas of a manufactured home community? It would seem that such a rule is reasonable. However, for a community owner, such a rule violates the FHA. On the other hand the Consumer Products safety Commission urges supervision of children while on a playground for example (Consumer Product Safety Commission, Public Playground Safety Checklist, CPSC Document #327: "10. Carefully supervised children on playgrounds to make sure they're safe"). The federal law states that the parents are responsible for their children, not the management.

Previously sustained rules

The courts have previously allowed the following rules. This information may be largely historical at this juncture, for it remains unclear whether or not they remain viable in light of the Plaza Mobile Estates decision (these rules were sustained under the previous "reasonableness" test, not the "compelling interest" basis test):

Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine – in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

However, it is too much to criticize or impugn the court for adhering to the letter of the law, and not legislating by "judicial fiat." The court interprets what the law is and does not legislate. That is the job of Congress and more pointedly in this case HUD (in its rule-making powers). The FHA prohibits discrimination, period. The federal law makes NO exceptions; exceptions to familial status rights is the job of HUD. It is not the court's duty. The court is not the Legislature.

The need for uniform guidelines to inform the housing providers of permissible restrictions

HUD should provide guidance for housing providers and establish bright line tests for common sense age-restrictive rules. HUD should defer to other legislative judgments made for child protection by allowing community owners to replicate existing laws in their rules and regulations. Model regulations for protection of the young could be published. HUD could establish a rule pre-approval procedure.

Community owners just want to comply with the law and provide reasonable requirements for protection of children. But now, even experienced lawyers cannot intelligibly predict the enforceability of any age-restrictive rules. At this time, attaining any ascribed legitimacy of a rule only follows after an expensive legal defense with a heavy burden of proof requiring compelling business necessity. A conciliation agreement binds the complainant. If another resident complains the next day, the conciliation agreement is worthless as a defense to the rule. This is an inconceivably inefficient manner of testing rule validity. The costs to business in such concerns vastly outweigh the benefit to be achieved. The cost to the consumer in spreading the expense of this exercise could be largely obviated if the housing provider had some guidance in defining acceptable rules for promotion of health and safety. The suggestion of administering proficiency tests is a null and void concept. The liability for negligently administering such tests, seeking and paying for qualified testers, and then excluding the non-proficient residents will not be pursued by a single housing provider.

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service – disseminating information and facts – not discriminating against children.[5]

You may also consider consulting with HUD in advance of amending rules and regulations. IF HUD even informally opines that a proposed policy is not defensible, or that no comment can be offered, at least the community owner can better assess the risk faced with a new rule and regulation. For example, if a resident complains that a particular resident who has open sores due to infection with the AIDS virus desires to use the swimming pool, can the management require that resident to stay out of the pool?

When faced with the question, the manger called to advise that she was not sure how to proceed. While administrative regulations require a doctor's letter stating that no public health or safety risk was posed by the patient's use of the pool, I consulted with HUD before announcing the management policy.

Finally

All the community owner wants is to know what the law is! What we do know is certain rules, certain practices reflecting what the law is not. But it is grossly unfair to relegate the duty to set standards on management. Having read this article, can you now, safely amend your rules to impose such a rule? No. No attorney can give an absolute assurance that such a rule will be sustained until ruled valid in a court. Until a court actually rules on the validity of the rule, or HUD or DFEH offers guidance on their interpretation of the rule, there can be no assurance of what an will not be permitted in developing age-restrictive rules and regulations. The best policy is to eliminate any and all age restrictive rules and regulations to avoid FHA claims.

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

Terry Dowdall has specialized in manufactured home communities' law since 1978. His firm, Dowdall Law Office, APC is located in Orange County and Sacramento, with a practice limited exclusively to the manufactured housing industry. Mr. Dowdall serves as a legal advisor on WMA's Legislative Committee and has authored publications for the Continuing Legal Education of the State Bar. He is a frequent contributor to the WMA Reporter and facilitator at WMA educational seminars. He can be reached at 714-532-2222 (Orange) or 916-444-0777 (Sacramento).

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools – drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures – CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[2] Municipal curfew regulations abound which restrict children. Los Angeles is typical. No one under 18 years of age is permitted in public places during school hours (" ... present in or upon the public streets, ... or any place open to the public during the hours of 8:30 am and 1:30 pm"). L.A.M.C. 45.04. The same restrictions apply after 10 pm. ("... any minor under the age of eighteen years to be present in or upon any public street, ... between the hours of 10:00 pm on any day and sunrise of the immediately following day; ...."). L.A.M.C. 45.03. Regulations for pool halls E.g. 17 (Midland Mi. Mun. Code Sec. 15-34) and 18 (1063-B. Pool halls. Public Laws of Maine) year age requirement), are commonly promulgated for the health and safety concerns for minors. It is unsafe for a park owner to rely on local or state laws in this respect in drafting rules and regulations.

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic–related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[4] According to the U.S. Products Safety Commission: "The U. S. Consumer Product Safety Commission estimates that between 1985 and 1989, the latest period for which data are available, there were 1,200 amputations of children's fingers because of contact with exercise bikes. Most children were under the age of five. Many of the injuries occurred when the child's fingers touched the moving bike wheel or the chain and sprocket assembly. The Commission is concerned about the severity of injuries to children, especially because the hazard may not be obvious. Therefore, the commission warns parents always to keep children away from exercise bikes. Never use a bike without a chain guard, and when not using the bike, store it where children cannot get to it. Children's fingers can be amputated if they touch moving parts of exercise bike." Prevent Finger Amputations to Children From Exercise Bikes: Safety Alert: CPSC Document #5028.

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality – they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles.

Phil Querin Q&A: Reasonable Accommodation Request and Social Anxiety Disorder

September 24, 2014

The FHAA

Among other provisions, it is unlawful:

Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
Use of the billiards room was restricted to residents over eighteen (18) years old;
Use of the spa was prohibited to children under eighteen (18) years old;
Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
Parent or resident child or resident host must accompany children at all times in the pool or pool area.
Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
At 2 p.m. children are to be out of the pool area;
Children are not to walk around the community without adult supervision;
Minors under sixteen (16) years old are not permitted in the therapeutic pool;
For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

Supervision restrictions

"Where no lifeguard service is provided, a warning sign shall be placed in plain view and shall state 'Warning - No Lifeguard on Duty' with clearly legible letters at least 10.2 centimeters (4 inches) high. In addition, the sign shall also state 'Children Under the Age of 14 Should not Use Pool Without an Adult in Attendance."

A few apparently unassailable precepts

Establishing minimum age requirements for supervision: A foray into the uncertain

Previously sustained rules

Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine - in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

The need for uniform guidelines to inform the housing providers of permissible restrictions

What can we do? Even in the absence of specific rules, educational materials may help parents understand common risks associated with youth. When educational information is provided as an adjunct to an activity rather than a rule restricting an activity, the chance of a claim of discriminatory preference is less likely to be made. For example, when a community owner offers such educational material from organizations who seek better protection of children, (e.g., police departments, charitable organizations, etc.) the community owner is providing a service - disseminating information and facts - not discriminating against children.[5]

Finally

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

[1] According to the United States Consumer Product Safety Commission, "...The main hazard from hot tubs and spas is the same as that from pools - drowning. Since 1980, CPSC has reports of more than 700 deaths in spas and hot tubs. About one-third of those were drownings to children under age five. Consumers should keep a locked safety cover on the spa whenever it is not in use and keep children away unless there is constant adult supervision. Hot Tub Temperatures - CPSC knows of several deaths from extremely hot water (approximately 110 degrees Fahrenheit) in a spa. High temperatures can cause drowsiness which may lead to unconsciousness, resulting in drowning. In addition, raised body temperature can lead to heat stroke and death. In 1987, CPSC helped develop requirements for temperature controls to make sure that spa water temperatures never exceed 104 degrees Fahrenheit. Pregnant women and young children should not use a spa before consulting with a physician. ... "CPSC Document #5112 "Spas, Hot Tubs, and Whirlpools Safety Alert".

[3] "[P]edestrian injury is the second leading cause of unintentional injury-related death among children ages 5 to 14. While the majority of pedestrian deaths and injuries are traffic-related, children ages 0 to 2 are more likely to suffer non-traffic-related pedestrian injuries, including those occurring in driveways, parking lots or on sidewalks. Although pedestrian injuries are not as common as motor vehicle occupant injuries, a disproportionate number of the injuries sustained by child pedestrians are severe. Between 25 and 50 percent of child pedestrian injuries require hospital admission. Children ages 5 to 9 are at the greatest risk from traffic-related pedestrian death and injury. Nearly one-third of all children ages 5 to 9 who are killed in traffic crashes are pedestrians").

[5] For example, educational material exist which explain that young children have peripheral vision which is two-thirds that of an adult; they have difficulty determining the source of sounds; traffic noises and sirens may be confusing; they may not understand that an automobile may seriously hurt or kill them; most children cannot understand a complex chain of events; children believe that all grownups will look out for them; they think that if they can see an adult driving a car toward them, the driver must be able to see them; children often mix fantasy with reality - they may give themselves superhuman powers and o not understand that a moving vehicle can hurt them; they have difficulty judging the speed and distance of oncoming vehicles.

The Fair Housing Coach: Hot Topics In Fair Housing Law

May 20, 2019

MHCO

First up: Sexual harassment. Accusations against high-profile celebrities, politicians, and media moguls, fueled by the #MeToo movement, have raised awareness and pushed the issue into the national consciousness. Likewise, it’s become a top priority for officials in the Justice Department and HUD, which continue to come down hard on those accused of sexual harassment against prospects, applicants, and residents. Meanwhile, the victims of sexual harassment in rental housing continue to turn to the courts, either on their own or with the help of fair housing advocates, to seek redress for their injuries.

Next up: Tenant-on-tenant harassment. Federal fair housing law bans not only sexual harassment, but also harassment based on race, national origin, or other protected characteristics. Most cases against community owners are based on the actions of managers or employees, but HUD regulations—and a recent court ruling—make it clear that communities face potential liability under fair housing law for tenant-on-tenant harassment under certain circumstances.

Last up: Criminal background checks. A few years ago, HUD released guidelines on how fair housing law applies to the use of criminal records by both conventional and assisted housing providers, and federal officials and fair housing advocates continue to press communities accused of discrimination based on criminal screening policies.

In this lesson, we’ll take each of these topics in turn, reviewing recent developments involving HUD, the Justice Department, and the courts, so you’ll understand how to handle these situations should they arise at your community. Finally, you can take the Coach’s Quiz to see how much you’ve learned.

SEXUAL HARASSMENT

The federal Fair Housing Act (FHA) prohibits discrimination in housing on the basis of race, color, religion, sex, national origin, disability, and familial status.

Sexual harassment is a form of sex discrimination banned under the FHA. The basic rules haven’t changed much, but it’s becoming increasingly urgent to take all steps necessary to prevent sexual harassment at your community.

Federal officials with HUD and the Justice Department have made it a top priority to crack down on sexual harassment in housing. In 2017, the Justice Department launched an initiative to combat sexual harassment in housing, and last year, it announced the nationwide rollout of the initiative, including three major components: a new joint Task Force with HUD to combat sexual harassment in housing, an outreach toolkit to leverage the Department’s nationwide network of U.S. Attorney’s Offices, and a public awareness campaign, including the launch of a national Public Service Announcement.

Earlier this year, HUD launched a campaign and training initiative to help protect people from harassment by landlords, property managers, and maintenance workers in HUD-assisted housing. The “Call HUD: Because Sexual Harassment in Housing is Illegal” campaign aims to educate the public about what behaviors constitute sexual harassment and what to do and whom to contact if they experience it where they live. The initiative also offers sexual harassment training to employees of public housing authorities and other housing providers.

“Complaints we receive and cases we see tell us that there are some housing providers who unfortunately prey on vulnerable men and women,” Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity, said in a statement. “No one should have to tolerate harassment or unwanted sexual advances in order to keep a roof over their head, and HUD will continue to take appropriate action when discrimination of this type occurs.”

Since launching the initiative, the Justice Department has filed nine lawsuits alleging a pattern or practice of sexual harassment in housing. The Department has filed or settled 14 sexual harassment cases since January 2017 and has recovered over $2.2 million for victims of sexual harassment in housing.

Example: In April 2019, the Justice Department announced a $600,000 settlement with a North Carolina property owner for allegedly subjecting 17 female prospects and residents to sexual harassment over the course of more than 10 years in violation of the Fair Housing Act and the Equal Credit Opportunity Act.

According to the complaint, the owner ran a real estate business that involved not only operating residential rental properties, but also selling homes through “owner financing,” meaning that he extended credit to individuals to purchase homes that he owned. The complaint alleged that he subjected female prospects and residents of these homes to sexual harassment by making unwanted sexual advances and comments; groping or otherwise touching their bodies without consent; offering to reduce or eliminate down payments, rent, and loan obligations in exchange for sexual favors; and taking or threatening to take adverse action against residents when they refused or objected to his advances.

Under the settlement, the owner agreed to pay $550,000 in damages to former and prospective residents, as well as a $50,000 civil penalty. The settlement also permanently bars him from participating in the rental, sale, or financing of residential properties, and requires that he relinquish his ownership interest in all such properties.

“Abusing power and control over housing and credit by committing acts of sexual harassment is an abhorrent and intolerable violation of every woman’s right to equal housing and credit opportunities,” Assistant Attorney General Eric Dreiband said in a statement. “The Justice Department, through its Sexual Harassment in Housing Initiative, will continue to aggressively enforce federal anti-discrimination laws against property managers and owners who cause women to feel unsafe in their homes.”

Example: In April 2019, the Justice Department announced that it has added more alleged victims in a sexual harassment case against the owner and manager of rental properties in Tennessee. The lawsuit alleged that the landlord, who owned and managed a mobile home park and other rental properties, sexually harassed a number of female residents at his properties. Among other things, the landlord was accused of conditioning housing or housing benefits on female residents’ agreement to engage in sexual acts; subjecting at least one female resident to unwanted sexual touching; making unwelcome sexual comments and advances to female residents; and taking adverse housing-related actions against female residents when they refused his sexual advances. The complaint contains allegations of unlawful conduct; the allegations must be proven in federal court.

“No woman should ever be subjected to sexual harassment or intimidation in her home,” Assistant Attorney General Eric Dreiband said in a statement. “The Fair Housing Act protects tenants from harassment and retaliation by their landlords, and the Justice Department will continue to vigorously enforce this law and seek relief for victims.”

“Property owners and landlords who use their position to harass residents or to attempt to trade sexual favors for rent violate the sanctity of an individual’s home, the place where they should feel the safest,” said Anna María Farías, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to take action against housing providers that violate the Fair Housing Act by engaging in this type of behavior.”

Example: In March 2019, the owners and former manager of more than 70 rental properties in West Virginia were held in civil contempt for failing to pay $600,000 still owing under a 2017 settlement with the Justice Department in a sexual harassment case.

The initial complaint alleged that a married couple and related entities owned the properties and that the husband, while serving as the manager, subjected female prospects and residents to egregious sexual harassment and retaliation in violation of fair housing law. In 2015, the husband pleaded guilty to sexual abuse and other charges and was incarcerated for two years for those offenses. The wife has since died.

According to the complaint, the husband sexually harassed multiple female prospects and residents from at least 2006 until he was incarcerated. Among other things, the husband was accused of engaging in unwanted sexual touching and groping; conditioning or offering tangible housing benefits in exchange for performance of sex acts; touching himself in a sexual manner and exposing himself in the presence of female residents; making unwanted and unwelcome sexual comments and verbal sexual advances; entering the apartments of female residents without permission or notice to sexually harass them; and taking or threatening to take adverse action against female residents who refused or objected to his sexual advances.

The wife was accused of failing to take appropriate steps to remedy the discrimination after receiving tenant complaints about sexual harassment. To the contrary, she allegedly took adverse housing actions, or threatened to take such actions, in retaliation for discrimination complaints.

To resolve the case, the defendants agreed to a settlement, which required them to deposit $500,000 into a compensation fund for potential victims and pay $100,000 in civil penalties to the government. The defendants made the first $100,000 payment but failed to deposit the remaining $400,000 into the compensation fund or pay the $100,000 civil penalty as agreed a year later.

The Justice Department took the case back to court, where the judge granted its request to hold the defendants in civil contempt for failing to pay the balance of the funds owed under the 2017 settlement agreement.

The defendants didn’t deny that they owed the money and failed to submit financial documents to prove their supposed inability to pay. They conceded that they owned more than $700,000 worth of property but said that they couldn’t obtain a loan secured by the properties. They didn’t want to sell the properties because the husband wanted to transfer his interest in the properties to his children and a forced sale of the properties at below market value “would only punish innocent persons not party” to the settlement agreement.

Rejecting those claims, the court said that obtaining fair market value for the sale of their real estate wasn’t required for the defendants to satisfy their obligations under the settlement agreement. The “innocent persons” at issue in this case were the defendants’ former female residents and prospects who have yet to be compensated for the harms they suffered as a result of the husband’s conduct [U.S. v. Walden, March 2019].

Coach’s Tip: Adopt a zero-tolerance policy against sexual harassment at your community. It’s important to have a clear, written policy that sexual harassment of any kind won’t be tolerated at your community and that violations will bring prompt disciplinary action, up to and including termination. Require all employees—from leasing agents to maintenance workers, whether full or part time—to receive fair housing training, including your sexual harassment policy.

TIME OUT!

Understanding Harassment Regulations

In September 2016, HUD adopted final regulations on fair housing protections for victims of harassment based on race, color, religion, national origin, sex, familial status, or disability. The new regulations cover “quid pro quo” harassment and hostile environment harassment in both private and publicly assisted housing.

Sexual harassment in housing threatens a resident’s safety and privacy in her own home, according to HUD. In its experience enforcing the FHA, HUD said that low-income women—often racial and ethnic minorities and persons with disabilities—may be particularly vulnerable to sexual harassment in housing. HUD’s final rule on harassment in housing includes formal uniform standards for evaluating claims of hostile environment and quid pro quo harassment in the housing context:

Quid pro quo (“this for that”) harassment involves subjecting a person to an unwelcome request or demand and making submission to the request or demand a condition related to the person’s housing.

Hostile environment harassment involves subjecting a person to unwelcome conduct that’s so severe or pervasive that it interferes with or deprives the person of the right to use and enjoy the housing.

The new rules also clarify when housing providers and other covered entities or individuals may be held directly or vicariously liable under the Fair Housing Act for illegal harassment or other discriminatory housing practices.

TENANT-ON-TENANT HARASSMENT

HUD’s regulations make it clear that fair housing law bans not only sexual harassment, but also harassment based on any protected class, including race, national origin, disability, and family status.

The regulations also clarify when housing providers and other covered entities and individuals may be held liable for illegal harassment and other discriminatory housing practices. Under HUD regulations, community owners may be liable under fair housing law for failing to take prompt action to correct and end discriminatory conduct, including harassment, by their employees or agents, where they knew or should have known about it.

You don’t have only your employees or other staff members to worry about—you could face liability for tenant-on-tenant harassment under certain circumstances. Based on the HUD regulations, you could be liable under fair housing law for failing to take prompt action to correct and end a discriminatory housing practice by a third party, where you knew or should have known of the discriminatory conduct and had the power to correct it. The power to take prompt action to correct and end a discriminatory housing practice by a third party depends on the extent of your control or any other legal responsibility you may have with respect to the third party’s conduct.

Example: In March 2019, a court ruled that a New York community could be liable under the FHA for an alleged campaign of racial harassment against an African-American resident by his neighbor.

After living at the community for several months, the resident claimed that his next-door neighbor began a relentless campaign of racial harassment, abuse, and threats directed toward him. From the start of the harassment, the resident said he feared for his personal safety, so he contacted the police and the site’s management to complain.

According to the resident, his first call in March 2012 prompted police officers in the hate crimes unit to visit the site, interview witnesses, and warn the neighbor to stop threatening the resident with racial epithets. That day the resident said he filed a police report, and a police officer told the management about the neighbor’s conduct. Allegedly, the management did nothing.

In May 2012, the resident said he called the police again and filed another police report. This time, the resident said he provided written notice to management about his neighbor’s racial harassment and racial slurs directed toward him between March and May 2012. It also provided contact information for the police officers responsible for investigating the neighbor. Allegedly, the management still took no action.

According to the complaint, the neighbor’s conduct persisted to the point that the police arrested him for aggravated harassment. In August 2012, the resident said he sent a second letter informing management of the continued racial slurs directed to him and the fact that the neighbor had recently been arrested for harassment.

In September, the resident said he contacted the police and sent the management group a third letter complaining about his neighbor’s continued harassment. After receiving the letter, according to the complaint, the management group advised the site manager “not to get involved,” and the management group declined to respond or follow up. To the contrary, the resident claimed that the neighbor was allowed to stay in his unit until his lease expired and he moved out in January 2013. A few months later, the neighbor pleaded guilty to harassment and a court entered an order of protection prohibiting him from contacting the resident.

The resident sued, accusing the owner and manager of violating fair housing law by failing to take action to address a racially hostile housing environment created by his neighbor. A district court ruled against the resident and dismissed the case.

On appeal, the court reversed, ruling that the resident could pursue his claims against the community for failing to do anything to stop the neighbor from subjecting him to a racially hostile housing environment.

The court cited HUD’s regulations, which specifically state that an owner may be liable under the FHA for “[f]ailing to take prompt action to correct and end a discriminatory housing practice by a third-party” tenant where the owner “knew or should have known of the discriminatory conduct and had the power to correct it.”

The court acknowledged that the owner’s ability to control a given resident is relevant to determining the owner’s liability. In some cases, an owner may not have enough control over its residents to be held liable for failing to intervene. According to HUD, the owner can be held liable only in circumstances where the landlord had the power to take corrective action yet failed to do so. That would mean that the landlord escapes liability under the FHA if the appropriate corrective action is “beyond the scope of its power to act.”

In this case, the resident’s complaint adequately alleged that the owner and manager engaged in intentional racial discrimination by tolerating and/or facilitating a hostile environment, even though they had authority to “counsel, discipline, or evict [the neighbor] due to his continued harassment of [the resident],” and also had “intervened against other tenants at [the site] regarding non-race-related violations of their leases or of the law.”

The complaint alleged that the owner and manager had actual knowledge of the neighbor’s criminal racial harassment of the resident but, because it involved race, intentionally allowed it to continue even though they had the power to end it. It may turn out that the owner tried but failed to respond. Or it may be that the owner was powerless to evict or otherwise deal with the neighbor. But the resident was entitled further proceedings to determine the level of control the owner and management group actually exercised over tenants and whether they had the power to act to stop the neighbor’s abuse [Francis v. King Park Manor, Inc., March 2019].

Coach’s Tip: Take all necessary steps to prevent—and address—discrimination or harassment at the community. Aside from ensuring that your policies and procedures conform to fair housing law, you can reduce the likelihood of a complaint by properly training and supervising all employees—not only managers and leasing staff, but also maintenance workers and anyone else who interacts with the public. And be particularly careful when hiring and supervising outside contractors or anyone else who could be considered your agent.

Promptly address any complaints of discrimination or harassment by conducting an investigation and, if warranted, taking adequate steps to stop the offending conduct. Get legal advice if necessary, and be sure to document what you’ve done so you’ll be prepared to defend yourself in case a claim is filed against you.

Just don’t try to solve the problem by doing anything that looks like you’re punishing the victim. According to HUD regulations, taking prompt action to correct and end the discriminatory conduct may not include any action that penalizes or harms the aggrieved person, such as evicting a resident who complains to you about discrimination or harassment by an employee, agent, or another resident.

CRIMINAL BACKGROUND CHECKS

Have you reviewed your criminal screening policies lately? If it’s been a while since you last reviewed your policy, it’s important to ensure that it doesn’t run afoul of HUD’s 2016 guidelines explaining how federal fair housing law applies to the use of criminal records in both conventional and assisted housing communities.

The HUD guidance doesn’t prevent communities from screening applicants based on their criminal history, but communities could face liability under fair housing law if its criminal history policy, without justification, has a disparate impact—or discriminatory effect—on minority applicants. It’s important to review the guidance in detail, but there are some steps you should take ASAP to reduce the risk of fair housing trouble. If, for example, your policy still considers arrest records in criminal background screenings, you should make some changes immediately. HUD’s new guidelines flatly say that excluding someone based on arrest records is likely to have a discriminatory effect based on race and national origin.

Check whether your policy still lists “all felonies” or long-ago felonies as reasons not to rent to someone. If so, you may be headed for trouble because the guidelines call into question the lawfulness of excluding people based on criminal convictions—without consideration of what the conviction was for or how long ago it occurred.

Example: In January 2019, a court refused to dismiss a lawsuit filed by an applicant who claimed that a community discriminated against him on the basis of race when it denied his rental application based on its policy to automatically exclude anyone with a felony conviction from renting a unit at the community.

The applicant was an African-American man with a felony conviction. At the time he submitted his application, the applicant met the income eligibility requirement for the unit he applied for, had no prior evictions, and didn’t have a bad credit history. The community allegedly notified him that his application had been denied due to a felony on his criminal record. The applicant said he called twice to request an appeal, but no one returned his calls.

The applicant sued, accusing the community of discrimination because its criminal background policy had a disparate impact based on race. According to the complaint, the applicant alleged that the community had an outwardly neutral policy of automatically excluding anyone with a felony conviction, but the policy had a disparate impact based on race because statistics showed that blanket bans based on criminal history resulted in the denial of housing opportunities at a disproportionate rate for African-Americans and minorities.

The court rejected the community’s request to dismiss the case. The applicant could pursue his disparate impact claim because the statistical racial disparity he relied on was directly related to its alleged policy of excluding a person with a felony conviction from renting at the community [Jackson v. Tryon Park Apartments, Inc., January 2019].

Check whether your policy allows applicants to explain the background of a felony conviction. The HUD guidelines say that communities should offer applicants with criminal records an opportunity to explain the circumstances and what’s happened since then—something akin to the “interactive” process for disability-related reasonable accommodation requests.

Example: In April 2019, a court dismissed claims by an applicant who accused a public housing authority of race discrimination by denying him housing because of his criminal record.

In his complaint, the applicant alleged that he applied to be placed on the public housing waiting list, requesting placement in the first available housing with wheelchair accessibility. At the time he applied in 2016, the PHA required a credit check and criminal background check for all applicants. The policy stated that certain factors could lead to a mandatory denial, including a homicide-related offense. The policy provided applicants with the opportunity to dispute the accuracy and relevancy of the information through an informal hearing.

After an interview, the PHA denied his application for two reasons: a police record—a felony guilty plea to involuntary manslaughter in 1997—and a landlord/tenant judgment against him for $871.

At his hearing, the applicant clarified that his conviction was for a misdemeanor, not a felony, and provided an explanation for the landlord/tenant dispute: He had missed payments only because he had avoided the rental office after being sexually harassed by an employee there.

The PHA reversed its decision regarding his conviction and gave him 30 days to provide proof that he had entered a repayment plan to resolve the landlord/tenant dispute.

The applicant didn’t meet the 30-day deadline, so the PHA upheld the denial of his application. A week later, he sent in the rental payment agreement and the PHA granted his application. Eventually, he signed a lease for a unit at a PHA property.

The applicant sued, accusing the PHA of race discrimination in violation of fair housing law and his due process rights by denying his application because of his criminal record.

Siding with the PHA, the court dismissed the case. The applicant claimed that the PHA discriminated against him and violated his due process rights by refusing to house him because of his criminal record, but the exact opposite was true: Although the PHA initially found him ineligible for housing because of his homicide-related offense, the PHA reversed its decision after a hearing revealed that the offense was only a misdemeanor. Nothing in the record showed that he was the victim of housing discrimination or that he was denied due process.

“There is no evidence that the PHA’s criminal history policy violates state or federal fair housing laws or the Constitution. [The applicant’s] case presents an example of due process at work. Although the PHA may have erred in its initial decision to deny [his] application for public housing, the PHA corrected that decision after giving [the applicant] a meaningful opportunity to demonstrate the PHA’s error” [Hall v. Philadelphia Housing Authority, April 2019].

Coach’s Tip: Whatever your policy on criminal background checks, be sure that you apply it consistently—without regard to race, color, national origin, or other protected characteristics. Applying it only to applicants who are members of racial or ethnic minorities, but not to white applicants, is a sure way to trigger a fair housing complaint.

Example: In October 2018, the Justice Department sued a Tennessee community and its property management company for allegedly denying the application of an African-American applicant because of his criminal record, despite approving the rental applications of two white people with disqualifying felony convictions.

The case dates back to 2012 involving a man living with his ex-wife at the community, who completed a lease application in which he disclosed a felony conviction for writing a bad check. According to the complaint, the community’s resident selection guidelines provided for rejection of applicants who had a felony conviction within the last 10 years as well as any conviction for the sale, distribution, or manufacture of controlled substances or certain sexual offenses.

According to the applicant, the community’s resident manager denied his lease application because of the policy not to rent to felons. Allegedly, she also told him that he was no longer allowed on the property because he was a felon.

Around the same time, according to the complaint, at least two other applicants who were not African American and who had criminal records in violation of the resident selection guidelines were approved for housing at the community. Allegedly, both disclosed their convictions on their applications: The first had a conviction for felony sexual battery and was on the national sex offender database; the second pleaded guilty to felony drug charges and was serving probation [U.S. v. Dyersburg Apartments, LTD., October 2018].

TIME OUT!

Court: Tenant-Screening Services Must Comply with Fair Housing Act

In a landmark civil rights decision, a court ruled that consumer reporting agencies must comply with the FHA when conducting tenant-screening services for landlords.

Fair housing advocates filed the lawsuit against a consumer reporting agency after its tenant screening product allegedly disqualified a disabled Latino man with no criminal convictions from moving in with his mother. The complaint alleged that the company’s screening product provided landlords with an “accept or decline” decision based on an assessment of an applicant’s criminal record. The lawsuit claimed that the screening company’s product discriminates based on race, national origin, and disability in violation of the Fair Housing Act.

The court rejected the company’s claim that the case should be dismissed because fair housing laws didn’t reach its services. According to the court, the company “held itself out as a company with the knowledge and ingenuity to screen housing applicants by interpreting criminal records and specifically advertised its ability to improve ‘Fair Housing compliance.’” Because consumer reporting companies functionally make rental admission decisions for landlords that use their services, they must make those decisions in accordance with fair housing requirements [Fair Housing Center et al. v. CoreLogic Rental Property Solutions, LLC, March 2019].

"Fair Housing Coach" articles are a benefit of MHCO membership. Sharing, duplication is prohibited.

Phil Querin Q&A - A Potpourri of Topics - Tips and Traps

March 24, 2017

Phil Querin

MHCO Legal Counsel

Evictions.

Most evictions are either for failure to pay rent or violation of rules. An eviction (formally known as a "forcible entry and detainer" or "FED") is an expedited legal procedure designed to allow landlords to obtain possession of their property through the court system. Oregon does not require that landlords obtain an attorney in order to file an FED. The necessary summons and complaint can be obtained from the courthouse and they can be filed and served quickly. This has its advantages and disadvantages: It is good insofar as it keeps the cost of the process down, but it is bad if the owner or manager fails to strictly follow all of the legal procedures required by the statutes. Accordingly, for the inexperienced manager or new owner, it is strongly, recommended that guidance first be sought, either through the MHCO, from an experienced attorney, or by consulting with a knowledgeable community management company.

Since the FED process is designed to be a "summary" or quick proceeding, the law imposes upon those seeking its assistance, i.e. owners and managers, the duty to strictly comply with all of the requirements set out in the statutes. This means, for instance, that the written notice that must precede the filing of the complaint (e.g the 72-hour nonpayment of rent notice or the 30-day notice of termination for cause) must be properly filled out to the letter. Since the notice is required to be attached to the FED complaint, and thereby becomes a part of it, if it is defective in any respect, the Court can unilaterally dismiss it - thus forcing the landlord or manager to start all over again. It is for this reason that before actually filing the summons and complaint which starts the FED court process, the plaintiff should closely review the notice to make sure it complies with the law.

Leases & Rental Agreements.

As a result of MHCO's efforts in the recent Legislative Session, landlords will be able to use leases for two year terms or more. At the end of the term, the tenant must either agree to a new updated lease as well as rules and regulations. Briefly, the process is as follows: Not more than 60 days prior to the termination of the lease, the landlord must provide the tenant with a copy of the new proposed lease and rules. Thereafter, the tenant has 30 days within which to either agree to the new terms or to vacate and remove the home. If the tenant declines to sign and elects to vacate, he/she can try to re-sell the home in the park for up to 12 months, so long as storage fees are paid.

The one limitation on landlords - and not an unreasonable one - is that the new lease agreement or rules that the tenant may be asked to sign must be the substantially the same as those the landlord is currently offering others who are seeking to rent a space in the community.

One caveat for landlords: If they fail to offer the new rules and lease agreement to the tenant on or before 60 days prior to expiration of the current term, the lease turns into a month-to-month tenancy.

Thus, the use of leases under the new law will now permit landlords to unilaterally update their rental agreements and rules. We'll be talking about this in depth at the Annual Convention.

Day Care Facilities.

Frequently, community managers are confronted with tenants who seek to open day care businesses in their home. There are multiple issues involved here. First, is it a violation of the existing zoning laws to use the home for a commercial business? Secondly, will it impact the landlord's insurance rates? Lastly, what about increased traffic and risk of accidents? All of these issues militate against permitting tenants to open such enterprises.

Landlords should review their rules and regulations to make sure they have adequate limitations on day care businesses. If they do not, consideration should be given to updating the rules to make the appropriate amendments. However, for those landlords or managers whose rules do not address the issue, how is one to proceed? Oregon law provides that violation of the law constitutes a breach for which a curable 30-day notice of termination may be given. Accordingly, the landlord or manager should first check the zoning law. If it is a residential neighborhood, there may be zoning restrictions on such business enterprises. Also, even if there is not current restriction, there is nothing illegal about instituting a restriction of day care facilities immediately. Oregon law permits such rules, even if they make a material modification to the landlord-tenant relationship, so long as they are passed by the tenants in a legally adopted rule change (i.e. 51% or more do not object.)

A True Opportunity to Purchase A Landlord's overt offer to Tenants and CASA of Oregon (Part 4)

By: Dale Strom

Dale Strom is a second generation Manufactured Home Community landlord. He is a Board Member, past President and current Treasurer of MHCO.

This is the fourth of a multiple part series on a private owner of a Manufactured Home Community willingly attempting to sell that Community to an Association of tenants within that Community. Riverbend MHP is a 39 space community located within the city limits of Clatskanie, OR.

In the third part, the meeting with the tenants is held in Clatskanie, OR. The turnout of the tenants was overwhelming to the author, as well as the enthusiasm of those in the Clatskanie PUD board room. The Author ends this day feeling that this purchase will, more than likely, have a good chance to occur.

In this fourth part, the author now awaits hearing from CASA the Association is formed and learning about the steps being taken during the due diligence, fund acquisition and appraisal periods. Soon, the closing date, November 1, will be here.

*****

Now that I'm home, and just spoken with my onsite manager about what occurred at the meeting, unknowingly, I am entering the Michael Collins phase. Who is Michael Collins you ask? The end of part 3 of this series will give you a hint. I will bring the Michael Collins analogy full circle later in this article.

The meeting at the Clatskanie PUD with the tenants was on June 26, a Tuesday. Other than my manager, I get no feedback from anyone at the meeting. It was either that Thursday or Friday that I call the phone number of the Development Director. No answer; so a message is left on the voice mail. The purpose of my call was to get a summary of what occurred after I exited the meeting.

No response to my message. I'm not going to send another message or phone call. Maybe I'm not to know what went on. Maybe there are things in flux where the information that I'm looking for is not solid. I will wait.

On July 5, nine days after the meeting with the tenants, I get an email from First American Title that a Title Report will be sent to me for my review and approval. I am given a gesture of a happy closing from the Escrow Officer. I guess this purchase is going through.

In a sale to a tenant group in order to form a cooperative, all homes must be owned by the occupants. There can be no park owned homes in a cooperative. OK, this is a small part of this process that I wasn't aware of. Not that it is a problem; but my manager lives in one home and another tenant that is on Section 8 assistance lives in another home that I both own. The home that my manager lives in shouldn't be a problem. I can finance that home to her and her husband, change the ownership documents to their names and I will become a lienholder.

The other home may be an issue. How do you sell a home to a person that doesn't have the proverbial pot to pee in"? To sell Riverbend

Revisiting Rules and Regulations in All-age Communities: Unenforceable Rules Trumped by Familial Status Rights

By Terry R. Dowdall, Esq.

The federal Fair Housing Amendments Act (FHAA) of 1988 created a new protected class of "familial status." In California, the federal courts have addressed these requirements by ruling that "all age" communities may not discriminate against children, no more than management can discriminate against any other protected class. This article is addressed to the need for continuing concerns over rule and regulation content and enforcement. This guidance comes from a case brought against Plaza Mobile Estates, defended by this office.

The FHAA

Among other provisions, it is unlawful:

Children under the age of fourteen (14) years old shall not be allowed to ride a bicycle on the community streets without the accompaniment of an adult registered to the manufactured home in which they reside;
Children under the age of eight (8) years old must be confined to a play area in the rear fenced yard of the family residence;
Children shall not be allowed to play on community streets, or in any other common are areas; Residents under the age of eighteen (18) years old shall not be permitted to use the recreation building (clubhouse) or any other recreational facilities without the accompaniment of an adult registered to the manufactured home in which they reside;
Residents under the age of eighteen (18) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
Residents and visitors under the age of eighteen (18) years old may use the swimming pool and sun deck during the hours of 10 a.m. to 12 p.m. (noon) every day. Residents and visitors under the age of eighteen (18) years old are not permitted around the pool or sun deck after 12 noon;Residents and visitors under the age of eighteen (18) years old are not permitted to use the saunas or therapeutic jet pool at any time;
Children under the age of fourteen (14) years old must be accompanied by a registered resident adult to be allowed to ride a bicycle in the community streets;The adult resident host must accompany all guests of their manufactured home who use the recreation building (clubhouse) or any of the recreational facilities of the community;
Children under the age of fourteen (14) years old must be accompanied by the registered resident adult from the same household in order to use any of the recreational facilities or recreational building (clubhouse);
When using the clubhouse, persons under ten (10) years old must be accompanied by an adult resident;
Use of the billiards room was restricted to residents over eighteen (18) years old;
Use of the spa was prohibited to children under eighteen (18) years old;
Use of the pool by children fourteen (14) years old and under required accompaniment by a resident;
Bicycle riding by anyone is prohibited unless accompanied by adult resident parent or adult host;
Parent or resident child or resident host must accompany children at all times in the pool or pool area.
Guests and residents under the age of eighteen (18) years old are permitted to use the swimming pool and sun deck from the hours of 9 a.m. to 12 noon only and must be accompanied by the parent or resident child or resident host;
No one under the age of eighteen (18) years old is permitted in the billiard room at any time;
No one under the age of fourteen (14) years old is allowed to use the Jacuzzi;
At 2 p.m. children are to be out of the pool area;
Children are not to walk around the community without adult supervision;
Minors under sixteen (16) years old are not permitted in the therapeutic pool;
For safety, children are not to ride bicycles, roller skate, skateboard, play in the street, play in RV storage, plan in car wash or wander around the community;
Children under with (8) years old shall be confided to a play area in the rear fenced yard of the family residence.

Considering the various age restrictive rules, they fall into three categories: (1) absolute prohibitions, (2) adult supervision requirements, and (3) hours of access restrictions.

Absolute prohibitions

Supervision restrictions

A few apparently unassailable precepts

Establishing minimum age requirements for supervision: A foray into the uncertain

Previously sustained rules

Rules which bar use of a pool for children fourteen (14) years of age and less have been upheld because the prohibition implements legislative policy. HUD v. Paradise Gardens, HUDALJ 04-90-0321-1, 1992 WL 406531 (HUDALJ Oct. 15, 1992)
A rule which required children under the age of fifteen (15) years to be accompanied by an adult who is at least eighteen (18) years old when using the swimming pool and exercise equipment. (HUD vs. Trace Corporation 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).
Rules have been sustained for age restricted access as to power tools. "...Respondents may keep the machine shop with industrial power tools accessible only to tenants who are at least fifteen (15) years of age and may require tenant children between the ages of fifteen (15) and eighteen (18) years to be accompanied by an adult who is at least eighteen (18) years old when using the machine shop. Further, Respondent may require all users of the machine shop to hve complete training on the proper use of such tools." (HUD vs. Trace Corporation, 1995 WL 434221 (H.U.D.A.L.J.)(Consent decree)).]\
In the unpublished decision of United States v. Town Hall Terrace Association, 1997 WL 128353 (W.D.N.Y. 1997), the housing provider made available four pieces of exercise equipment: a multi-purpose with lifting machine, a stationary bicycle, an inclining board and a rowing machine – in its "the fitness center." Until 1992 an express policy restricted the use of the fitness center and its equipment to persons at least eighteen (18) years old. After mid-1992, this threshold was lowered to sixteen (16).[4]
One case allowed for a rule requiring adult supervision of children six (6) and under while biking in a street. U.S. v. M. Westland Co., CV 93-4141, Fair Housing-Fair Lending 15,941 (HUD ALJ 1994)). Another authority states that no child should be permitted in a street on a bicycle until at least ten (10) years of age. ("Cycling should be restricted to sidewalks and paths until a child is age 10 and able to show how well he or she rides and observes the basic rules of the road. Parental and adult supervision is essential and until the traffic skills and judgment thresholds are reached by each child." The National Safe Kids Campaign Bicycle Injury Fact Sheet, September, 1997).

But under the more recent Plaza Mobile Estates decision, the past allowances provide no basis on which to write your rules and regulations.

Don't blame the court!

The need for uniform guidelines to inform the housing providers of permissible restrictions

Finally

Reprinted with permission from Western Manufactured Housing Communities Association (WMA) "Reporter", June 2008.

SEXUAL HARASSMENT CLAIMS IN THE WORKPLACE: WHAT MHC OWNERS AND MANAGERS NEED TO KNOW

November 2, 2017

William R. Hart

Hart King Law

Attorney

The Law and Sexual Harassment

Sexual harassment in the work place is a form of illegal sex discrimination and is absolutely prohibited by both state and federal law. It has become the most common form of work place harassment. Any unwelcome sexual advance in the work place, either verbal or physical, is considered sexual harassment.

Any such advance or conduct by an employee, independent contractor or vendor may be unlawful if it affects an individual's employment, interferes with that employee's work performance or creates an intimidating or hostile work environment. California and numerous other states have expanded the scope of sexual harassment to include pregnancy and gender identity issues.

Federal and state law recognize that sexual harassment in the work place often produces in employees feeling of anger, frustration, shame, depression and in more extreme cases, post-traumatic stress disorder. As an MHC owner or manager you should know that the law governs all work place relationships. In addition to employees, it covers the relationship between your employees, independent contractors, vendors, outside co-workers, supervisors and your park residents.

Both an employee who is accused of sexual harassment and the employer who is responsible for that employee's supervision may be liable for damages to the victim. Of particular importance is that fact that an employer may be held strictly liable where a supervisor is accused of harassment even when the employer was unaware of the harassment.

The damages that may be recovered by an employee against another harassing employee or the employer include:

The recovery of back wages and benefits;
The recovery of litigation fees and costs;
Order requiring the rehire of the employee; and
The recovery of damages for emotional distress and lost reputation. In certain states unlimited compensatory and punitive damages are also allowed and the employer may be ordered to undergo specific sexual harassment training.

What is Sexual Harassment?

There are two basic types of sexual harassment: Quid pro quo (an instance where a supervisor conditions a job benefit on sexual activity); or hostile work environment (where there is a pervasive environment of harassment or innuendo that interferes with an employee's performance). The law recognizes that a single incident of sexual harassment, if severe, can constitute sexual harassment in the work place. Of course, a series of less severe incidents occurring in the work place, when taken together, may constitute sexual harassment as well. The key to determining whether or not conduct rises to this level is to determine whether or not the conduct negatively alters the employee's work environment in a material way. These determinations will be evaluated against a "reasonable person standard". A judge or jury deciding such a case would typically be asked to place a "reasonable person" in the shoes of the alleged victim for the purpose of evaluating whether or not a reasonable person would be injured in a similar way and to the same degree as claimed by the alleged victim.

Sexual harassment can be found in various forms of speech, including routine conversation, the giving of compliments, innuendo, off-color jokes and embarrassing personal inquiries. The common thread is that this speech is sexual in nature and unacceptable to the victim.

Generally, remarks constituting sexual innuendo are always inappropriate and therefore, illegal. Jokes involving a person's sexuality, appearance, orientation, or bodily functions are also usually inappropriate and illegal. It is entirely predictable that such jokes will be offensive to one or more employees who may be listening and therefore unreasonably interfere with their working environment. Remarks of a personal nature including an employee's sex life, sexual preference, history, etc. are also off-limits and should be avoided in every instance.

Sexual harassment constituting quid pro quo amounts to illegal sexual favoritism. An employee who is offered benefits in exchange for sexual favors; denied benefits for the refusal to exchange sexual favors; and assignment and compensation benefits in exchange for sexual favors are all illegal sex discrimination.

Non-verbal harassment can also constitute illegal work place activity on the part of the employer. Examples of this type of behavior include staring, leering, sexually oriented hand gestures, invading personal space, facial expressions and personal gifts of a sexual nature. Of course, unsolicited or unwelcome physical contact of a sexual nature is categorically prohibited. This type of behavior includes any unwelcome touching, blocking, or hazing.

It is important for MHC owners and managers to be aware of the fact that they may not allow displays of sexually provocative material to exist in their work places. This includes the display of such posters, signs, cartoons or pictures in the work place. Unwanted personal letters, sexually oriented emails or texts are also illegal and may form a sound basis for a sexual harassment claim.

Investigating a Claim

As a MHC manager, you may be supervising multiple employees, independent contractors and vendors on a day-to-day basis. You may be the first person to receive a complaint. You may be in a position to respond constructively to such a complaint and potentially keep your company and the owner of the park free from liability. As a park manager, you should always contact your immediate supervisor and the park owner so that they are aware of the alleged conduct and the steps being taken to address and resolve the claim. It may be advisable to retain the services of a law firm specializing in employment law at an early juncture to initiate and coordinate the investigation of a sexual harassment claim in the work place. In this way, much of the investigation can be managed at a professional arms-length, while ensuring that much of the information received remains confidential and protected from later discovery in the event of litigation.

In the event that an employee makes a claim of sexual harassment in your work place, it is very important that the employer (or a law firm on your behalf) take immediate steps to investigate the claim and prevent any further harassment from taking place. Those steps are as follows:

Separately interview the victim and the accused. These interviews should be recorded (with the participants' knowledge) or reduced to writing and reviewed and acknowledged by the interviewee;
The employee should pursue other avenues of investigation to determine the facts, including discreet one-on-one interviews with other potential witnesses, review of physical evidence, including correspondence, email's, pictures, etc. and assemble all in the investigative file;
Once the employer is reasonably sure about the facts, appropriate and immediate steps should be taken to stop the conduct to ensure that it does not continue;
The employer should schedule periodic follow-up meetings with the victim and document the results of that follow-up meeting to ensure that the employer's remedial steps are working; and
Ensure that there is no retaliation of any kind against the victimized employee.

A MHC owner or manager should take all reasonable steps to protect the privacy of each individual involved in the investigation. Information about the investigation should only be shared with whom it's necessary to investigate and resolve the claim. You cannot promise complete confidentiality because it may be necessary to share certain information with others to gain a complete understanding of the events leading up to the claim. Only those who absolutely need to know within the company should be involved. You should take every reasonable step to protect reputations while learning the facts.

Bill Hart is the managing partner of Southern California law firm, Hart King, and is the client relationship partner for the firm's manufactured housing practice group. He can be reached at (714) 432-8700 or at whart@hartkinglaw.com.

Phil Querin Article - Tips and Traps and Lessons Learned

June 6, 2017

Phil Querin

Querin Law

MHCO Legal Counsel

1. "Pick Your Shot" Never pick a fight you don't think you can win. And if you decide to fight, make sure you get in your best shot. By this I mean the following: (a) Just because a tenant has violated one of the park rules, don't think the first thing you must do is file a 30-day notice to terminate. If you file the notice, you've got to stick with it. If the tenant fails to make the correction within the 30-day period, you may have no choice but to file for eviction. Most lawyers want to go to court in an eviction proceeding with a file showing that the landlord or manager has "walked the extra mile" in trying to work with the tenant. Judges and juries can be naturally sympathetic to tenants. It bodes better for landlords when the evidence suggests that the tenant was either ignoring the landlord, or intentionally trying to aggravate the situation by breaking the rules. Landlords and managers should strive to have at least two - if not more - polite reminder notices sent to the tenant. The reminder does not have to give the tenant 30 days to come into compliance. If a week is reasonable, give a week. If compliance doesn'toccur within that time, send a second reminder, giving another week. If compliance occurs, but the violation reoccurs, give another reminder. The more paper in the file, the better the landlord's chances of prevailing in court. (b) Once you decide to file for eviction, make it your best shot. For example, if the tenant has broken three of the rules, only select the most serious ones. And if the violation is something that can be verified by photographs, take some. Make sure that the photos accurately depict the conditions constituting the violation as of the date immediately preceding the date of the 30-day notice. When the 30 days has expired, immediately take another set of pictures that prove the violation was not cured. Never take the pictures on the 29th or 30th days. Take them on first day after expiration of the 30 days. Also, if the matter does go to court and the violation still exists, take pictures immediately before trial. (c) If the case is capable of being resolved prior to filing, or even prior to court, give it serious consideration. For example, say the tenant cured the violation on the 35th day after receiving a 30-day notice - and has pictures to prove it. It is doubtful that a judge will evict them, even if they were technically outside of the 30-day compliance period. Consider dismissing the case if the tenant will pay the filing fees.

2. Draft All Default Notices Carefully In the vernacular of lawyers, the notice is "jurisdictional" - that is, it is the basis upon which the court will or will not exercise jurisdiction by hearing the case. If a 30-day notice is defective, say because it gave the tenant 29 days to comply instead of 30, the court cannot hear the merits of the case. You could have the best case in the world, and would have won in court without question - but it will make no difference if the notice is defective. The court has no alternative but to dismiss the complaint. If the tenant was represented by an attorney who filed an answer or other legal document on behalf of the tenant, it is probable that you will have to pay his/her attorney fees. Accordingly, if in doubt, have your attorney review the notice before it goes out... especially if the tenant is one that will likely refuse to comply and force you into court.

3. don't be Afraid to Dismiss If the notice is obviously defective, there is a high likelihood that the other attorney will recognize it. If so, consider dismissing the case as soon as possible. It will serve no purpose - except to pad the other attorney's pocket book - by continuing the fight in court. Sometimes it is better to simply start over. Dismiss the case, send out a corrected notice, and if the tenant fails to comply, file another eviction. Although Oregon law does not require that landlords use an attorney to file evictions, it is always a good idea in those cases in which you know the tenant is already represented, or will seek legal representation before trial. In such cases, landlords should consider having their attorney at least review the background facts and notice before the eviction is filed.

4. Maintenance Violations These are one of the most prevalent and difficult of tenant violations. There are several reasons. Frequently, the violation, say continually storing "junk" on the space in plain view from the street, is really a matter of degree. For example, while a barbecue and picnic chairs, neatly covered, may not be a problem, if they are old wooden chairs, a dilapidated table, a broken down barbecue, and an old air conditioner, all covered with a torn canvass tarp held in place by firewood, it will pose a problem. Unfortunately, it is frequently such cases that gets into court - the tenant arguing that the problem is not as bad as the landlord maintains. Also, landlords must be careful about consistent treatment. It makes little sense to go to court against one tenant with a poorly maintained space, if there are a dozen others whose spaces are just as bad. In such cases, where the landlord (or perhaps the predecessor landlord) has been lax in enforcing maintenance violations, it is wise to first send out a park-wide notice to all tenants that the maintenance rules will be enforced. The notice should request that all tenants clean up their spaces, if necessary. Give everyone 30, 45, or 60 days to comply, during which time the manager should work with the worst offenders. Managers should take careful notes, documenting their efforts to secure compliance.

5. Select & Keep Good Managers Not only is this good for the landlord, but it is good for tenant relations, as well. There are exceptions. Some tenants will attempt to demonize even the best managers. Unfortunately, the reverse can be equally true. But generally, good managers will get along with their tenants. This will go a long way in keeping peace in the park. But being a good manager is not simply being liked by the tenants. Good managers will enforce the rules in an even-handed and fair manner. They will be cordial with tenants and always attempt to communicate a rules violation first with a visit or phone call. Such efforts should always be documented for the file. Evictions can be won or lost depending upon whether the managers are likeable. My experience has been that when a dispute gets into court, the tenant, along with his/her witnesses, will attempt to place blame on the conduct of the manager. For this reason, the history of any case that finds its way to court should be replete with documentation that the manager attempted to work with the tenant. The judge and/or jury should be convinced that the eviction was a last resort, and that the manager did everything humanly possible to secure the tenant's compliance before the case was ever filed.

Avoiding Common Mistakes That Have a Big Effect On a Mobile Home Park's Cash Flow

March 15, 2016

Joanne Stevens

Real Estate Broker

Mistake #1: Rent increases

A lot of times owners act as if below market rent is the same as earning a merit badge. It isn’t. Having under market rent loses you money every month. If the property ever goes on the market, it will sell for less and maybe a lot less. Today a tenant isn’t going to move because the rent goes up to market. Most tenants know what the rents are at other mobile home parks (often having better market rent intel than the owner). They won’t be surprised when the rent goes up to market. If the owner is doing a good job of operating the mobile home park, higher rent won’t be cause to move. When doing a rent increase, include the rent survey for your market, showing the rent charged at other communities. Also, be sure to factor in the water, sewer and garbage, if included in the lot rent. The water and sewer are probably $30–$60 per month per house- hold, depending on the city, and the garbage is probably $9–$15 per month per occupied site. If you are paying for these, consider how you may pass these utilities through. Be sure to factor in an estimate of water, sewer and garbage for the owners that pay it or the tenants.

Mistake #2: Rent Survey

What should the rent be? Not that many owners do annual rent surveys. If you have a manager, that should be their job. If there are owners of multiple mobile home parks in your market, look to their rents as a benchmark of the real rent. After all, these companies have to report earnings to shareholders or investors. They can’t succeed by charging above market rents.

Mistake #3: Holding On Too Long

When you have a park owned home that isn’t selling, it’s time to let go, and get it sold or rented. Anyone that has been in this industry for a while and sells homes knows what it feels like to have an unsold mobile home that sits month after month with no offers. You market it, keep utilities on, pay insurance and cleaning, the staff shows it countless times and nothing. It’s time to cut the price (ouch!) or do whatever needs to be done to sell the home. Each month that passes is another month of rent you’ll never recover.

The same thing is true for mobile home park ownership. Sometimes the mobile home park property looks great on paper. After you actually own it, you find it’s not your cup of tea. Maybe it’s too far away from your office, the demand for homes isn’t good, or a major employer shuts down, to name a few reasons why investors sell a mobile home park. In Warren Buffet’s 2014 Letter To Investors, he freely writes about big mistakes he made early on with Berkshire Hathaway; mistakes that might have been deadly for the company. In fact, the Berkshire company (a textile company) which became the Berkshire of Berkshire Hathaway, closed 18 years after Mr. Buffet acquired it, and he writes, “During all of those 18 years, we struggled unremittingly, all to no avail. But stubbornness —stupidity—has its limits....I finally threw in the towel and closed the operation.” Mr. Buffet goes on to say that he knew the Berkshire company acquisition “... was a mistake. Having committed much of (the company’s) resources...I quickly compounded the error by continuing to invest in a business that eventually became the most costly of my career.” If the Sage of Omaha can admit to millions of followers that he blundered, then perhaps business owners and investors should take a page out of Mr. Buffet’s playbook and cut the cord when something isn’t working, be it a park owned home OR a park.

Mistake #4: Financing

There is a lot of refinancing and new loan action today. Why? The low interest rates plus the threat of rising interest rates are the reasons. The Federal Reserve has been making noise for what seems like years, about increasing the interest rates. As the economy improves and the jobless recovery continues to dissipate, the

Federal Reserve finally raised interest rates in late December of 2015. Not all lenders are the same though, and finding a lender, whether it be local, regional or national will make a big difference in both the amount financed (dollars to you!) and the ease of the transaction.

Mistake #5: Records

Today there is truly user friendly and effective software for mobile home parks. I use Rent Manager and so do a lot of other mobile home park owners. For your own peace of mind do yourself, your accountant, your manager and a buyer a big favor, and invest in good software (it’s not that much money). A couple of years ago, I hired a property manager with no accounting background. She took to Rent Manager like a duck to water. My accountant is also a big fan. Don’t be intimidated by upping your game with great software.

Mistake #6: Survey, Phase I and Appraisal

Once upon a time, when you acquired your property, you might have had the property surveyed, appraised and a Phase I (California) environmental assessment done. If you didn’t order these reports, whoever you bought from may have left them in the office or the survey may have been recorded. Try checking with the county recorder or county engineer. These re- ports will save you money and time if you ever need to update them, or your heirs or a buyer require them. It’s faster and cheaper, for example, if the land surveyor has an existing survey to start with.

Mistake #7: Water and Sewer

Please do something about this, both for your cash flow and the environment. These pesky leaks can be tough to find. Some of the large owners use American Leak Detection (Google it —they have regional offices). They are not cheap, but they will find your leaks and fix them. Water leaks are expensive; it is money you won’t ever recover. One time I sold a mobile home park where the owner knew he had a water leak to the tune of about an extra $2,000 per month. This was a small mobile home park. When he sold the park, a condition of the sale was to find the water leak(s) and fix them. By then, he really wanted to sell his park because his company (not the mobile home park business) was growing and the business re- quired his full attention. The upshot was that after losing at least $40,000 in water costs he hired two companies (the first company didn’t find it) about $3,000 to find the leak and another couple of thousand for the second company to fix the leak. The moral of the story is that you will never get back the wasted water bills, so it’s best to bite the bullet and find and fix the leaks.

Joanne Stevens is a real estate broker specialist in listing and selling mobile home parks and manufactured home communities throughout the U.S.

She can be reached at 319.378.6785 phone; 319.365.9833 fax; and email: joannestevens@ joannemstevens.com

This article was recently published in WMA's February 2016 "Reporter". MHCO would like to express our deep appreciation to WMA for allowing MHCO to upload this article to MHCO.ORG.

COVID-19: Considerations for Landlords and Property Managers

March 21, 2020

MHCO

COVID-2019 is a new strain of coronavirus that emerged in central China at the end of 2019 and continues to spread around the globe. The COVID-2019 outbreak has been declared a pandemic by the World Health Organization (WHO) and is already having a major effect on international commerce. As the outbreak expands in the United States, commercial real estate owners and property managers should be well prepared to monitor and address concerns impacting the industry as a result of the virus.

The typical commercial lease and property management agreement does not address viral epidemics. The duties and obligations of a landlord or property manager regarding limiting tenants' and guests' risk of exposure to the virus depends on what services, if any, the landlord or property manager provides at the property. In a net leased property where the tenant is responsible for its own maintenance and cleaning services, the landlord's public health obligations would be limited. However, a landlord or property manager who provides cleaning, janitorial and security services such as in a commercial office building or shopping center, should consider implementing the following operational recommendations:

consult your local health department and the U.S. Centers for Disease Control and Prevention (CDC) for the latest information on the virus and guidelines for controlling transmission
clean routinely and frequently touched surfaces and objects, including but not limited to, bathrooms, security desk areas, elevator banks, turnstiles, escalators, door handles, communal kitchens or pantries, bathrooms and the like
offer materials, in multiple languages, to educate employees, visitors, vendors, delivery personnel and staff about proper hand hygiene and cough etiquette
install hand sanitizer stations in high-traffic areas of the building
advise any employees who may feel sick to limit face-to-face contact with others and to seek immediate medical help
consider alternatives and safety protocols for large, public events held on the building property
review your internal communications and preparedness plan and ensure that all building staff are ready, know their role in keeping the property and its guests safe, and are aware of all communication protocols
follow Occupational Safety and Health Act (OSHA) requirements, set forth in Sections 13 and 14 of OSHA No. 1 of 2006, which impose various duties on the employer to ensure a safe and healthy work environment
discuss human resource considerations such as screening employees that have traveled to areas where the virus has been reported and implementing protocols for dealing with a situation where an employee may be infected with the virus
review leave policies and confirm compliance with legal requirements around mandatory quarantines
consider ongoing communications with tenants and service providers to inform them of the steps you are taking to clean and sanitize the property and learn how they are addressing the outbreak with their employees and customers
conduct risk assessment analysis and anticipate supply chain interruption
review any rights or remedies the property may have under policies of insurance, which may include coverage for business interruption
consult with counsel about the COVID-19's impact on the property, contractual obligations and business operations